ReadWrite - businesshttp://readwrite.com/tag/business
enCopyright 2015 Wearable World Inc.http://blogs.law.harvard.edu/tech/rssTue, 03 Mar 2015 14:38:18 -080015 Signs That It’s Time to Start Really Expanding Your Startup<!-- tml-version="2" --><div tml-image="ci01c3d76c10019512" tml-image-caption="" tml-bad-render-layout="inline"><figure><img src="http://a3.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTI3MTgyMDcyMDEwODA3Nzc0.jpg" /><figcaption></figcaption></figure></div><p><em>Guest author Scott Gerber is the founder of the <a href="http://yec.co/">Young Entrepreneur Council</a>.</em></p><p>Feel like a big fish in a small pond? Sales numbers healthy but not growing anymore? There are a lot of moving factors to weigh before you start seriously scaling your business. When should you pull the trigger and take things to the next level? <br tml-linebreak="true" /><br tml-linebreak="true" />I asked 15 entrepreneurs from the <a href="http://yec.co/">YEC</a> how they knew it was the right time to scale their businesses and why. See what they had to say, below. <br tml-linebreak="true" /></p><h2>When I Outgrew Old Goals</h2><p>The timeline that I had set for myself when I originally started was hit in a shorter time period than I had anticipated, and I knew I had reached that point of being a "big fish in a small pond." My goals were too big, my vision was too great and I knew I needed to expand and scale my business into something greater.</p><p>It's just that simple. Once you've realized you've made your original goals too attainable by the standard you've set, then scale—expand, but make sure you have the right resources and funding to do so.</p><p>—<a href="https://twitter.com/xponentialblack">Rob Fulton</a>, <a href="http://www.exponentialblack.com/">Exponential Black</a></p><h2>When I Calculated My Efficiency Ratio</h2><p>The efficiency ratio is calculated by dividing operational expense by revenue. A lower ratio demonstrates higher efficiency. When the ratio is low, demonstrating higher efficiency, I tend to initiate scaling.</p><p>—<a href="https://twitter.com/nethacker">Phil Chen</a>, <a href="http://www.systemswatch.com/">Systems Watch</a></p><h2>When We Made Magic</h2><p>At RTC, it took us eight years to refine our model because we were inventing an approach to our industry (book writing and thought leadership) that never existed. We had to invest significant time and energy to arrive at a model that loves our clients (authors/thought leaders) through their entire journey (writing, branding, publishing, community building, monetization).</p><p>Over the years we created a collaborative writing model, publishing house and design divisions. While our quality has always been good to great, earlier this year we started seeing our work become beautiful, magical. Then later this year, we became a HubSpot Agency Partner to solve for community building. Now it's time to scale. My first step was to free my staff to do whatever it takes to create their most brilliant work.</p><p>—<a href="https://twitter.com/CoreyBlake9000">Corey Blake</a>, <a href="http://www.roundtablecompanies.com/">Round Table Companies</a></p><h2>When We Reached 80 Percent Capacity</h2><p>We scale a little before we feel we're ready. If you wait till you feel 100 percent ready, the moment has likely already passed you by. First step: We add resources—both foreign and U.S. service companies—to scale. This has been easier and faster for us than going the employee route. The rule of thumb we use—when you're at 80 percent capacity, scale up.</p><p>—<a href="http://twitter.com/joshualee1978">Joshua Lee</a>, <a href="http://standoutauthority.com/">StandOut Authority</a></p><h2>When We Had a Strong Financial Buffer</h2><p>As an advocate of bootstrapping, I knew it was the right time to scale when we had more than enough funds to hire new team members and operate comfortably for the next few months even if sales took a sharp downturn. We made sure that we would never have to lay off anyone after hiring too aggressively, and knew our own limitations in terms of how quickly we could scale.</p><p>With this self-awareness, we avoided a lot of other problems overambitious entrepreneurs run into, which is excessively high burn rates and underwhelming growth. We want to build a business that has staying power, and have made enough mistakes in the past that we now know how to avoid them.</p><p>—<a href="http://www.twitter.com/firaskittaneh">Firas Kittaneh</a>, <a href="http://www.amerisleep.com/">Amerisleep</a></p><h2>When We Increased Monthly Sales Growth</h2><p>We knew it was time to scale our business because we were running out of inventory all while having month over month sales growth. The first step we took was effectively starting to forecast, which we didn't do prior, especially as a startup not knowing which bags would sell the best and at what volume.</p><p>We now look six to 12 months out and we start planning our manufacturing so we know what we'll have on hand and when. We also make sure it's reflective of our overall sales objectives for the coming year. It's all about effective planning. That's key.</p><p>—<a href="https://twitter.com/markalansamuel">Mark Samuel</a>, <a href="http://www.fitmarkbags.com/">Fitmark</a></p><h2>When We Realized the Opportunity Cost Was Too High Not to Try</h2><p>About 18 months into building Modify, I started to think about our growth and what could be next. We had a strong brand, a small but passionate fan base, some major licenses (Major League Baseball), distribution (Best Buy) and press (New York Times, Men's Health), but we just weren't scaling.&nbsp;And I realized that everyone on our team could be more successful if they worked elsewhere.</p><p>We had a nice foundation, but in a meeting, our entire team decided that we would rather aim high and flame out than not even try. After building consensus, our first step was to build an investment pitch deck that revolved around a vision that we could stand by. We had so much alignment that if an investor said she would give us money only if we followed our plan exactly, we would say yes. We then raised money!</p><p>—<a href="http://twitter.com/ModifyWatches">Aaron Schwartz</a>, <a href="http://www.modifywatches.com/">Modify Watches</a></p><h2>When We Didn't Want to Lose First Mover Advantage</h2><p>One of the best ways to know you're ready for scale is when you start to notice competitors trying to shift into your space or offerings. You should start to scale more rapidly to not lose first mover advantage. It's important to start scaling once you really understand your business in-depth and have the systems in place to run smoothly even at larger growth.</p><p>Once we determined we were ready for scale, we raised additional capital to grow our resources and bandwidth so that we could pursue larger market share and solidify our position in the market with our unique offerings.</p><p>—<a href="http://www.twitter.com/DoreenBloch">Doreen Bloch</a>, <a href="http://www.poshly.com/">Poshly</a></p><h2>When We Had to Turn Down Potential Business Opportunities</h2><p>We otherwise would have accepted this business, but our resources were engaged and we wanted to associate ourselves with good brands and interesting projects. We also discovered that the pain points we address are the same across state boundaries. We knew if we could replicate our model in two different cities in different states, then we were onto something. We knew it was time to scale.</p><p>—<a href="https://twitter.com/rtslabs">Jyot Singh</a>, <a href="http://rtslabs.com/">RTS Labs</a></p><h2>When We Reached a Point of Comfort</h2><p>Our user experience was fantastic and our processes were in line. At this stage of our product, we realized it was time to scale. We began by building our team and putting the right hires in place. We focus on bringing in those that can both lead a team and help build our infrastructure.</p><p>—<a href="http://twitter.com/Gbousis">George Bousis</a>, <a href="https://www.raise.com/">Raise Marketplace</a></p><h2>When We Were Able to Define a Repeatable Sales Model</h2><p>Once you've taken an entire sale from prospect to close in a predictable and controlled fashion, you're ready to teach that model to multiple salespeople, partners, resellers, or automate it. When we landed our first Fortune 500 company via intentional efforts, we realized that this model can be repeated by others many times over. We hired a number of salespeople and empowered a number of partners to do so and started to see the process grow faster than linearly.</p><p>—<a href="https://twitter.com/Brenomics">Brennan White</a>, <a href="https://www.watchtoweranalytics.com/">Cortex</a></p><h2>When Sales Growth Stalled</h2><p>When my business started to hit ceilings and generate similar sales from previous quarters, I knew it was time to scale. When it comes to scaling a business, my approach has always been the same—to grow the business by becoming a stronger brand.</p><p>The first step was finding the right person for the job.&nbsp;I hired an employee with experience in branding and made sure to hire someone with experience in the social media marketing, content marketing and public relations. Upon hiring who I felt best fit my requirements, I explained the situation and the goals and worked on creating a plan of action and a timeline, allowing us to work on everything step by step and move forward.</p><p>—<a href="http://www.twitter.com/stanleymeytin">Stanley Meytin</a>, <a href="http://truefilmproduction.com/">True Film Production</a></p><h2>When Successful Realtors Wanted to Join Us</h2><p>We knew that a franchise model was a logical next step because we were constantly getting inquiries from successful brokers who wanted to know more about our model. When we chose our first franchisee, we deliberately aligned ourselves with a professional who had a solid reputation for ethics and high performance. That’s a strategy we’ve used in every market we enter.</p><p>—<a href="http://twitter.com/KJewgieniew">Kuba Jewgieniew</a>, <a href="http://www.realtyonegroup.com/">Realty ONE Group</a></p><h2>When We Noticed Healthy Customer Traction</h2><p>Don’t wait until you have a huge customer base to reinvest in your business. Scaling can mean different things to different people, but early on, we knew to keep investing in our business. This doesn’t happen instantly or at a specific point in time, but I think you can say: If you’re getting customer traction, they’re paying for it, they’re happy and they're continuing to use your product, then keep investing.</p><p>Then you can scale in different ways, like raising your first investment round. Those investors will want to see that customer traction. Then you start scaling in terms of adding salespeople or building more product.</p><p><a href="http://www.twitter.com/@kristinesteuart">Kristine Steuart</a>, <a href="http://www.allocadia.com/tag/leading-in-change-series/">Allocadia</a></p><h2>When We Had Proof of Concept and a Scaleable Infrastructure</h2><p>In order for it to make sense to scale, you need to know that there are enough buyers for your product, so you should start by determining the addressable market. When we started Yodle, it was always our goal to scale because we knew we had a large addressable market—small business owners.</p><p>We knew that the time was right when we had a product that could scale. Don’t try to go big on a minimum viable product. Before you decide to scale your business, ask yourself, “Do I have proof of concept? Have I proved that the product will sell? Do I have the infrastructure in place to scale?”</p><p>—<a href="http://twitter.com/yodle">Ben Rubenstein</a>, <a href="http://www.yodle.com/">Yodle</a></p><p><em>Lead image by <a href="https://www.flickr.com/photos/jdhancock/3760104591">JD Hancock</a></em></p>When to go for scale.http://readwrite.com/2015/01/05/scale-your-startup-yec
http://readwrite.com/2015/01/05/scale-your-startup-yecStartMon, 05 Jan 2015 08:31:27 -0800Scott GerberWhat Your Business Can Learn From Ello<!-- tml-version="2" --><div tml-image="ci01c1a5da50012a83" tml-image-caption=""><figure><img src="http://a5.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTI2NTY0NjIwODAxNDcwNDM0.jpg" /><figcaption></figcaption></figure></div><p><em>Guest author Yoav Vilner is a co-founder of <a href="http://www.ranky.co/">Ranky</a>.</em></p><p>It’s almost 2015, and it’s time everyone&nbsp;realized that users matter more than anything. Yes, more than the actual product and&nbsp;far more than the short-term revenue that app developers and social networks can earn off them.</p><p>Yet not everyone gets that. Certainly not Facebook, which—as this <a href="http://time.com/facebook-world-plan/">recent <em>Time</em> piece</a>&nbsp;illustrates—is still busy aiming to expand across the globe.&nbsp;Facebook isn’t asking for money upfront but rather selling all of our personal&nbsp;data and spanking us with advertisements in order to earn their dough.</p><p>It's a strategy Todd Berger, co-founder of the "anti-Facebook" social network Ello, calls<a href="http://betabeat.com/2014/12/mark-zuckerberg-ello-will-fail-cant-connect-the-world-without-being-free/"></a>&nbsp;its "<a href="http://betabeat.com/2014/12/mark-zuckerberg-ello-will-fail-cant-connect-the-world-without-being-free/">world domination approach</a>."&nbsp;Ello is taking &nbsp;a different path—one based on a "freemium" business plan for users that gives them basic access for free, promises not to sell their data to advertisers, and allows them to pay for additional features such as upgraded profile designs.</p><p>As <a href="http://betabeat.com/2014/12/mark-zuckerberg-ello-will-fail-cant-connect-the-world-without-being-free/">Berger told BetaBeat</a>:</p><blockquote><p>“Freemium is working the world over,” Mr. Berger said, “Versus: ‘No, no, it’s free, it’s free! But we’re selling all your data to god knows who at exorbitant rates in order to create new scams for people who didn’t ask for it.'”</p></blockquote><p>Ello&nbsp;offers more than feel-good principles, a potentially ad-free model, and a possible threat to the Facebook throne. Although the social network has taken its share of arrows for an elusive business&nbsp;model, a glitchy site design, and difficulty living up to the <a href="http://readwrite.com/2014/09/25/ello-what-is-it-social-network-facebook-privacy">enormous wave&nbsp;of interest</a> it started drawing earlier this year, it still offers a key insight for businesses of all stripes.</p><blockquote><p><strong>See also: <a href="http://readwrite.com/2014/09/25/ello-what-is-it-social-network-facebook-privacy">What The Ell Is Ello? The Ad-Free Social Social Network Everyone Is Talking About</a></strong></p></blockquote><p>In short, today’s users may&nbsp;prefer to settle for less rather than be exploited and ignored.&nbsp;</p><h2>How Ello Is Like Occupy Wall Street</h2><p>Like the Occupy movement a few years back, Ello is a case of frustrated citizens&nbsp;reclaiming their authority to speak up against giants.&nbsp;Internet users are making it clear they want autonomy: We want to feel that the&nbsp;Internet is ours. We get irked when news leaks of companies abusing <a href="http://readwrite.com/2012/03/19/do_web_consumers_value_their_privacy">our&nbsp;information or privacy</a> because we inherently believe the Internet is a service by&nbsp;the people and for the people.&nbsp;</p><p>No matter what area you work in, the Ello phenomenon serves as a strong&nbsp;reminder that users matter more than profit margin or marketing campaigns. Too often companies behave in a way that shows they seem to believe&nbsp;they are the ones in charge. In fact, though, your business is nothing without&nbsp;customers.&nbsp;</p><p>Ello gained so much traction because its <a href="http://readwrite.com/2014/09/25/ello-what-is-it-social-network-facebook-privacy">public launch as an ad-free social&nbsp;network</a> timed perfectly with the <a href="http://readwrite.com/2014/09/29/facebook-google-targeted-advertising-personal-data-cookies">growing concerns</a> over user privacy and&nbsp;advertisements on Facebook.&nbsp;Online advertisements have become inevitable and inescapable, but there’s a&nbsp;way to advertise while still prioritizing the experience of your customers.</p><h2>Putting Users First</h2><p>Today, your customers are huge influencers over the course of your business.&nbsp;This is why we keep hearing about engagement and the importance of creating&nbsp;personal bonds with your online community.</p><p>It’s no wonder that successful&nbsp;entrepreneurs are launching new platforms designed to do just that. That would&nbsp;explain Eric Schmidt's investment in <a href="http://commercesciences.com/">Commerce Sciences</a>, which aims for&nbsp;new&nbsp;levels of website personalization and engagement, or the new venture by Soluto co-founder Ishay Green, <a href="https://www.spot.im/">Spot.IM</a>, which helps websites transform their existing traffic into an&nbsp;on-page social community.&nbsp;</p><p>Treating customers as numbers to collect data, failing to take users’ complaints&nbsp;seriously, and not demonstrating that you care about their needs is a surefire way to lose your customers’ faith and put your entire business&nbsp;at risk.&nbsp;</p><p>“Companies are hunting cookies and IDs, but does that makes the customer&nbsp;happy?” Ivan Guzenko, VP of UK-Based <a href="http://smartyads.com/">SmartyAds</a><a href="http://smartyads.com/"></a>, says. “The customer&nbsp;should return as the king, not as the target audience.”</p><p>Guzenko adds:&nbsp;</p><blockquote><p>The technology used right now to target people is working unfairly. I believe the&nbsp;user should actually get money for viewing ads and disclose only the information&nbsp;he sees right.</p></blockquote><h2>Why This All Matters</h2><p>The Internet marketplace is a nation, and its citizens want a voice. Whether&nbsp;sharing user experiences about local stores online, rating a company on Yelp, or&nbsp;choosing where to spend money, the voices of users matter.&nbsp;</p><p>Take a look at<a href="http://www.theatlantic.com/technology/archive/2014/10/a-year-after-death-of-silk-road-darknet-markets-are-booming/380996/"> the death of the black market website Silk Road</a>. Users&nbsp;didn’t simply take the FBI's raid of the hidden site as the inevitable end of the Internet&nbsp;black market. Instead, they sought new ways to re-create it. Much the way Ello's functionality remains a pale shadow of what Facebook offers, the bot-ridden Silk Road imitators, replacements may not be up&nbsp;to par with the old model.</p><p>Still, users often value authority over quality. Stay at the&nbsp;top of the rat race by giving users a sense of power, control, and voice.&nbsp;</p><p>While Facebook is busy trying to dominate the world by selling the information of&nbsp;their billions of users, Ello is learning from the serious backlash of Facebook’s&nbsp;privacy actions.&nbsp;</p><h2>What This Means For Your Business</h2><p>Think of your <a href="http://readwrite.com/2014/04/28/startups-entrepreneurs-rivals-competitors">competition</a>. Identify the leaders in your niche and figure&nbsp;out their weaknesses. What aren’t they giving their customers? How can you&nbsp;provide customers with those missing elements and possibly convert them to your product or service? How can&nbsp;you improve your advertising and data collecting strategies in a way that genuinely puts customer concerns first?</p><p>Because Ello picked up so much steam so fast, it faces a risk of burning out. So&nbsp;avoid following in Ello’s footsteps, and be sure that you can follow up on the&nbsp;promises you make possible clients—or risk even more wrath if your service fails&nbsp;to meet expectations.</p><p>Users migrate all the time, so getting them to feel your service is impossible to leave is&nbsp;key. What’s important to learn from Ello is the importance of <a href="http://readwrite.com/2010/11/15/how-to-leverage-design-convers">retaining the customers</a>&nbsp;you already have and strengthening their bond to you. Facebook’s pull is strong—right&nbsp;now, arguably the strongest of all social media sites—but if Facebook doesn’t begin to&nbsp;pay more attention to its users’ concerns, it may be standing on a rickety platform.&nbsp;</p><p>Don’t find yourself in this position—prepare to weather storms with your loyal customers&nbsp;by your side.</p><p><em>Lead photo by <a href="https://www.flickr.com/photos/thomashawk/15200100238">Thomas Hawk</a></em></p>Users matter more than anything.http://readwrite.com/2014/12/17/ello-business-lessons-users-first
http://readwrite.com/2014/12/17/ello-business-lessons-users-firstSocialWed, 17 Dec 2014 07:00:00 -0800Yoav VilnerHow Skimlinks Built A Company As Global As Its Product<!-- tml-version="2" --><p><em>This post is presented by <a href="http://bit.ly/Zwk0Oj">Business Is Great Britain</a><a href="http://bit.ly/1cYhvZd"></a>.</em><em></em></p><p>The Internet is global, so why shouldn’t your company be, too?</p><p>Alicia Navarro, the founder and CEO of Skimlinks, learned early on that when you’re selling products or services over the World Wide Web, people can access them worldwide. That means customer service, technical support, and all other aspects of your business ought to be just as easy for them to reach. </p><p>Skimlinks helps Web publishers make money by turning mentions of products into affiliate links—clickable, trackable &nbsp;links for which retailers pay sites when customers end up buying things. Since Web publishing and e-commerce have global appeal, Navarro has had to learn to run her business to reflect that. From its beginnings in Sydney, Australia, Skimlinks now has 65 employees spread around the world and dual headquarters in London and San Francisco.</p><p>In an interview with ReadWrite, Navarro gave us some pointers on running a business that's gone global faster than you may have expected. </p><h2>Give The People What They Want</h2><p>Skimlinks has been an exercise in quick shifts from the very beginning. Navarro originally set out to build a social decisionmaking service. Her custom program for affiliate linking—the predecessor to Skimlinks—was simply a way to make money off of it. </p><p>“I found that when I was pitching for [venture capital] money or customers for our white-label service, nobody was interested in our social decisionmaking tool," Navarro said. "They were all interested in this unsexy monetization technology that I built. I realized that if I wanted to survive, I’d have to throw away everything I’d built for the last year and instead commercialize this so that other websites could use it to make money on their sites.”</p><blockquote tml-bad-render-layout="inline"><p><strong>See also:&nbsp;</strong><a href="http://readwrite.com/2013/09/19/pinterest-advertising-strategy"><strong>Pinterest's Second Attempt At Making Money Actually Sounds Smart</strong></a></p></blockquote><p>Today, Skimlinks runs on 1.5 million sites run by 40,000 individual publishers, with 18,000 merchants and affiliate networks as partners. Affiliate marketing is thought to have gotten its start in 1996, when Amazon launched its Associates program, and it's done nothing but grow since. Forrester now estimates that spending on affiliate marketing <a href="http://marketingland.com/affiliate-marketing-trends-for-2013-29374">will grow to $4.5 billion by 2016</a>. &nbsp;</p><p>The first step to a successful global business is identifying a product people universally want. Navarro’s original idea could never have become a global business because it wasn’t universally appealing. But making money off of a website, it turns out, is.</p><h2>Begin Where The Opportunity Is</h2><p>Navarro is a native Australian, but lives and works in London today. Leaving her homeland was a matter of finding a locale where she could find local investors for her business, something she was unable to secure in Australia. </p><p>“There was one venture capitalist in Sydney, that was it,” she said. “I pitched to him and the answer was no, and that was it, I was stuck.”</p><p>After that, Navarro said she “did what every self-respecting Australian does when they’re trying to find an answer and I went on a walkabout.”&nbsp;</p><p>Six weeks of backpacking led her back to London, where she’d previously lived in her mid-twenties. </p><blockquote tml-bad-render-layout="inline"><p><strong>See also:&nbsp;</strong><a href="http://readwrite.com/2014/07/14/startup-international-cities-expansion"><strong>10 Great International Cities For Your Business</strong></a></p></blockquote><p>“I ended up deciding to move back to London because I’d managed to secure a first customer for the white-label service and I’d managed to find office space at an incubator,” she said.&nbsp;“The choice I guess was between the US and the UK, but I had a UK visa, I knew more people there, and I was more comfortable there. So I moved to London where I could be a full-time entrepreneur, and where my first customers were.”</p><h2>Keep It Together</h2><p>Fast-forward to 2014. Skimlinks has a London office, a San Francisco office, and is about to open a New York City office, too. Even with that breakneck expansion, Navarro has cofounders and employees who have been with her since her Australia days. </p><p>The key to keeping that international mixture smooth, Navarro said, is by maintaining a similar culture in each office through frequent visits from veterans of the business. </p><p>“We deliberately timed the move to San Francisco with two-and-a-half years of being in London,” she said. “We thought, now we have a solid-enough base in London that we can risk breaking it into two different teams.”</p><p>Navarro made sure that two of her original team members made it on to the San Francisco team, and built the rest of the satellite office around them. </p><blockquote tml-bad-render-layout="inline"><p><strong>See also:&nbsp;</strong><a href="http://readwrite.com/2014/07/08/business-partnership-startup"><strong>12 Things You Should Do Before Entering a Business Partnership</strong></a></p></blockquote><p>“I made sure that the new office was seeded with what I call cultural ambassadors—people who are from the original team, who are strong representatives of the brand, who would be the kernel of the new office’s culture,” she said.</p><p>Finally, Navarro herself spends most of the year traveling in between the two offices, and plans to include the New York office in that rotation soon.</p><p>“II think the companies that don’t succeed are the ones that hire a standalone employee and expect them to operate on their own in isolation," Navarro said. "It requires a lot of flying, face-to-face time, and a lot of founder time back and forth to not only support that person but not make them feel lonely."</p><p>A global product, an opportune starting point, and a central business culture that unite the far-flung corners of her business are the pillars of Navarro’s success with Skimlinks. Now as she expands to mobile as well as desktop, to clients in Asia and beyond, and to yet another new office, Navarro doesn’t have any plans to change her method of attack. </p><p>“I think we do those three things very well and it’s enabled us to expand to San Francisco and we’re now replicating that path as we set up our New York office,” she said.</p><p>A product with global appeal—and a globetrotting personal touch. Those are Navarro's secrets. Can you make them yours, too?</p><p><em>Photo courtesy of Alicia Navarro</em></p>Alicia Navarro shares her secrets.http://readwrite.com/2014/11/11/skimlinks-alicia-navarro-global-business-building
http://readwrite.com/2014/11/11/skimlinks-alicia-navarro-global-business-buildingWorkTue, 11 Nov 2014 09:00:00 -0800Lauren Orsini10 Startup Metrics Every Entrepreneur Should Measure<!-- tml-version="2" --><div tml-image="ci01bc6f57c001efe2" tml-image-caption=""><figure><img src="http://a2.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTI1MDk3MzExNTI4MzM5NDY2.jpg" /><figcaption></figcaption></figure></div><p>ROI, customer churn, growth margins—these are all fairly standard metrics to track while you're building your company. But there are so many more numbers to be aware of as you try to build a profitable business.</p><p>To find out which underrated startup metrics entrepreneurs should be measuring, I asked 10 founders with growing companies from <a href="http://yec.co/">YEC</a> what they were keeping tabs on now.</p><h2>Cost of Acquisition</h2><p>Most startups understand their growth, lifetime value and main business metrics, and they're able to optimize funnels to make the company more efficient. However, to create true scale, startups need to understand their cost of acquisition: the predictable cost of signing up a new user coming from ads, campaigns, etc.</p><p>By understanding the cost of one user and comparing that to its lifetime value, a startup can confidently scale to millions of users.</p><p>—<a href="https://twitter.com/micho">Pablo Villalba</a>, <a href="http://8fit.com/">8fit</a></p><h2>Employee Happiness</h2><p>Tracking employee satisfaction is an underrated metric at startups, but can also be a useful one. With so much going on at a startup and with high pressure to perform, measuring employee happiness with a quick monthly survey can be a great way to surface any unexpected challenges.</p><p>Rather than focus on a specific number or benchmark with this metric, it's a great way to create a conversation for employees and showcase that well-being is important.</p><p>—<a href="http://www.twitter.com/DoreenBloch">Doreen Bloch</a>, <a href="http://www.poshly.com/">Poshly</a></p><h2>Burn Rate</h2><p>You can project future cash needs based on how much cash is coming in and going out. It's so important but rarely a point of emphasis.</p><p>You have to pay taxes at some point on all of your revenue. This is the biggest mistake I've seen, and it takes down so many companies. It afflicts starter entrepreneurs and young companies who've yet to garner funding. Aim for a six-month payback to avoid running out of cash.</p><p>—<a href="http://twitter.com/joshualee1978">Joshua Lee</a>, <a href="http://standoutauthority.com/">Standout Authority</a></p><h2>Qualified Pipeline Value</h2><p>Startups tend to ignore pipeline metrics in general—but knowing what sort of sales you can expect to come in over time can be crucial to your ability to plan. At the very least, understanding your qualified pipeline value can tell you if you're going to burn through your cash on hand before you'll see a profit.</p><p>Calculating your qualified pipeline value does require you to do some deeper investigation into who your paying customers are and what it takes to get them to write that all-important check. But it's an incredibly valuable metric once you have the numbers in place.</p><p>—<a href="http://www.twitter.com/thursdayb">Thursday Bram</a>,&nbsp;<a href="http://www.hypermodernconsulting.com/">Hyper Modern Consulting</a></p><h2>Net Promoter Score</h2><p>Your net promoter score is the most accurate way to measure loyalty in correlation with growth of the company. It proves (or disproves) the likelihood that your customers will vouch for your business and speak on behalf of its services.</p><p>Word of mouth is the most powerful form of marketing. When testimonials are shared among a group of individuals who have complete trust in one another’s opinions, they have a greater impact.</p><p>—<a href="http://twitter.com/Gbousis">George Bousis</a>, <a href="http://www.raise.com/">Raise Marketplace</a></p><h2>Client Engagement</h2><p>Most startups focus on new clients, which makes sense because you need customers to succeed. But you also need to know how engaged those clients are and if they’re going to stay with you, repurchase or commit to a contract.</p><p>The goal is to keep new clients, not replace them each month. Analyzing engagement can shed light on certain aspects of your strategy that need improvement.</p><p>—<a href="https://twitter.com/aatanacio">Alfredo Atanacio</a>, <a href="http://www.uassistme.co/">Uassist.ME</a></p><h2>Retention</h2><p>Too often entrepreneurs are focused on either revenue or total users, but this isn’t the most valuable metric for your company at this phase. How many people are coming back to your site or app on a daily basis?</p><p>If you have 10,000 downloads but only 10 people view the app per day, you likely have a serious longevity concern. Use tools such as Mixpanel to determine this number, then scale.</p><p>—<a href="http://twitter.com/gideonkimbrell">Gideon Kimbrell</a>, <a href="http://www.inlist.com/">InList</a></p><h2>Missed Business Opportunities</h2><p>Always tell your sales staff to measure any business they turn down and why. Figure out whether you're turning down the business because it's something you don't offer yet or if it's something as simple as short supply.</p><p>If you're not measuring how much money you are passing up, you won't be motivated to find a way to increase your bottom line. Aim to make as much money as possible without saying no to people who want to give you their money.</p><p>—<a href="http://www.twitter.com/robsetsail">Robert De Los Santos</a>, <a href="http://www.skyhighpartyrentals.com/">Sky High Party Rentals</a></p><h2>Organic User Acquisition</h2><p>This is the cheapest way to acquire new users. And if entrepreneurs already measure this, they can start optimizing for it, which dramatically decreases growth-associated costs.</p><p>—<a href="http://twitter.com/rameet">Rameet Chawla</a>, <a href="http://www.fueled.com/">Fueled</a></p><h2>Employee Engagement</h2><p>This shows that your employees believe in the vision of your startup and are in it for the long haul. Employees should be invested in the company’s long-term success rather than working to check off tasks.</p><p>—Jyot Singh, <a href="http://rtslabs.com/">RTS Labs</a></p><p><em>Image by&nbsp;<a href="https://www.flickr.com/photos/29969125@N05/10295911456/in/photolist-gFPeLL-i7nFS5-6JugNL-3vJT4T-3ge6h8-7otAFk-5WKhhs-3pq7sS-6svoD3-5tJkLC-7TojHk-fhwT1Z-5mgJKT-8GAQus-pKUZb-4K3AQE-5RXCo8-aAfUdx-bNCBVB-dMnpd1-rpsBZ-dL5rYT-6HcFKa-4SwDVd-87DUrR-PpcUU-6V2dXs-7dmmNv-fkqLEh-d6cxBj-nH8cTC-2LiWJr-7FiVAQ-5N4nJB-cq1TcC-7ACpR4-iWhU6M-7zGMtZ-fKKa81-8BUkxU-agwaMn-5v3Cst-kCcNTV-4k2Xgh-jy3bjn-212ZoJ-7KaZLr-gcgEpe-5tCfsS-7tvFut">Natalie Shuttleworth&nbsp;</a></em></p>Founders share the numbers they're keeping tabs on.http://readwrite.com/2014/11/04/startup-metrics-entrepreneurs-yec
http://readwrite.com/2014/11/04/startup-metrics-entrepreneurs-yecStartTue, 04 Nov 2014 07:00:00 -0800Scott GerberHow To Code Like A Startup<!-- tml-version="2" --><p>Ever wonder why your Silicon Valley developer peers make more money than you? As Brookings analyst <a href="http://www.brookings.edu/blogs/the-avenue/posts/2014/08/06-the-silicon-valley-wage-premium-rothwell?utm_source=Twitter&amp;utm_medium=Social&amp;utm_campaign=BrookingsInst08091&amp;utm_content=BrookingsInst08091">Jonathan Rothwell points out</a>, it's not because they're more experienced than you. Rather, it's because the technology skills they do have are "particularly valuable."</p><p>What are these skills, you ask?</p><p>While it's impossible to get an exact read, <a href="http://codingvc.com/which-technologies-do-startups-use-an-exploration-of-angellist-data">Leo Polovets' analysis of AngelList data</a><a href="http://codingvc.com/which-technologies-do-startups-use-an-exploration-of-angellist-data"></a> offers some strong clues as to the skills you need to build a winning startup (and a few, <a href="http://readwrite.com/2014/08/11/why-learn-php">like PHP</a>, that you'd do better to avoid).</p><blockquote><p><strong>See also: <a href="http://readwrite.com/2014/08/11/why-learn-php">PHP, Once The Web's Favorite Language, Is On The Wane</a></strong></p></blockquote><h2>The Valley's Money Machine</h2><p>Developers everywhere are a well-paid lot. As <a href="http://projects.flowingdata.com/2014/industry/">U.S. Bureau of Labor Statistics data shows</a>, there are over 643,000 application developers in the U.S., with salaries ranging from $42,250 to $183,380, across 66 industries. Developers in the Information and Manufacturing industries carry particularly big wallets.</p><p>The closer a developer is to a coast, the better her chances of clearing $100,000, as <a href="http://www.brookings.edu/blogs/the-avenue/posts/2014/08/06-the-silicon-valley-wage-premium-rothwell?utm_source=Twitter&amp;utm_medium=Social&amp;utm_campaign=BrookingsInst08091&amp;utm_content=BrookingsInst08091">Brookings analysis shows</a>:</p><div tml-image="ci01a8bfd7d25f860b" tml-image-caption="Credit: Brookings"><figure><img src="http://a4.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTE5NTU2MzIzNzkzNTM2NTIz.jpg" /><figcaption>Credit: Brookings</figcaption></figure></div><p>As much as developers make, generally, however, they make most—and by a considerable margin—in San Jose, Calif.</p><p>Why?</p><blockquote><p><strong>See also: <a href="http://readwrite.com/2014/06/24/distributed-development-open-source-colocation">Distributed Development—You're Doing It All Wrong</a></strong></p></blockquote><p>Well, there's the obvious element of supply and demand that keeps driving developer salaries ever higher. Developers tend to get paid more in the Valley because, well, employers have little choice. (Actually, they do, as <a href="http://readwrite.com/2014/06/24/distributed-development-open-source-colocation">I've written</a>, but too few take the choice of remote, open source-style development.)</p><div tml-image="ci01a87e1f24d6860f" tml-image-caption=""><figure><img src="http://a3.files.readwrite.com/image/upload/c_fill,cs_srgb,w_620/MTE5NTU2MzIzNzk0MTI2MzQ3.png" /><figcaption></figcaption></figure></div><p>Even so, Rothwell says that something more may be driving Silicon Valley developer wages: they tend to possess higher-value tech skills. As he writes:</p><blockquote><p>For example, 8.4 percent of ads for software developers in San Jose requested Java, a widely used programming language, associated with an average salary of $98,000 across all U.S. ads mentioning both it and a salary requirement. Yet, for the United States as a whole, just 5.7 percent of software developer ads required Java. In New York City, the share was 6.7, and it was 4.7 in Louisville.</p></blockquote><p>Despite having less experience than developer peers in other high-cost, competitive metropolitan areas, Silicon Valley developers make more because they know more about the tech that matters most.</p><p>So which tech is this, exactly?</p><h2>What The Popular Kids Use</h2><p>Using AngelList data, Leo Polovets peeks under the hood of successful startups and compares the technology they use to those of lesser startups. It's an imperfect measure—it's not 100% clear that the AngelList "Signal" score Polovets relies on truly measures company quality and popularity, although it seems to do so reasonably well. Still, it's at least a running start at figuring out what successful startups—and the developers that power them—use to build their applications.</p><p>In the following charts—and apologies in advance; they're also small and hard-to-read in the original—the different colors represent how "successful" the startups in question are, as measured by that "signal" score.</p><p>Sometimes, as in the case of programming languages, the best and worst developers use the same technology:</p><div tml-image="ci01b529046cc7860c" tml-image-caption=""><figure><img src="http://a3.files.readwrite.com/image/upload/c_fill,cs_srgb,w_620/MTIzNjEzMTg5MTYzNzQ2ODMw.png" /><figcaption></figcaption></figure></div><p>But sometimes there's a clear delineation between what the most successful startups use and what the least successful companies adopt.&nbsp;</p><p>For programming languages, for example, Polovets notes that "[t]he likelihood that PHP is being used is strongly anti-correlated with company quality." Similarly, "[t]he better the company, the more likely it is to be using modern and/or functional programming languages (i.e. Go, Scala, Haskell, Erlang, Clojure)."</p><p>Or take the database, storage and caching layer:</p><div tml-image="ci01b529046cc5860c" tml-image-caption=""><figure><img src="http://a4.files.readwrite.com/image/upload/c_fill,cs_srgb,w_620/MTE5NTU2MzIzNzk1Njk5MjEx.png" /><figcaption></figcaption></figure></div><p>There aren't any real surprises in terms of what the top startups use (MySQL with a big lead). But Polovets' conclusion that "[t]he better the company, the less likely it is to build on top of Microsoft's products (SQL Server)" might be a wake-up call to Microsoft developers. So might his suggestion that company quality strongly correlates with iOS development and that "[t]he better the company, the more likely it is to use IaaS (e.g. AWS) instead of PaaS."</p><p>Strong developers, in other words, seem to want to have more direct control over the technologies they use, rather than offloading the heavy lifting to a platform.</p><h2>Growing Out Of Neverland?</h2><p>While Polovets' data suggests across the board that "The better the company, the less likely it is to build on top of Microsoft's products," it's clearly not a good reflection of which technologies are currently most important to big companies. Microsoft remains the <a href="http://rcpmag.com/articles/2013/02/15/microsoft-top-vendor-to-cios.aspx">top "mega-vendor" with CIOs</a> and looks unlikely to lose that place anytime soon.</p><p>But the data does help to remind us why Silicon Valley's software developers get paid so much: they know the best new technology, which technology may well turn out to be the fuddy-duddy technology of the future. (Java, for example, <a href="http://readwrite.com/2014/07/31/java-relevance-dominance-programming-language-coding">remains highly relevant today</a>, but used to be the language of upstarts.)</p><p>Is it enough to know these hot technologies? Probably not. If you're living in Des Moines, Iowa, you're probably not going to get a Silicon Valley salary no matter how much Haskell you know. </p><p>Then again, you won't have to deal with traffic along Highway 101, either, so consider yourself even.</p><p><em>Lead image by <a href="http://www.flickr.com/photos/37996580417@N01/2888094254">Cory Doctorow</a></em></p>The technologies that bring the biggest paycheckshttp://readwrite.com/2014/08/12/code-like-startup-best-technology-language-databasei-infrastructure
http://readwrite.com/2014/08/12/code-like-startup-best-technology-language-databasei-infrastructureWorkTue, 12 Aug 2014 07:42:59 -0700Matt Asay8 Questions You Should Ask A Key Employee Before They Quit<!-- tml-version="2" --><div tml-image="ci01af657b453d860d" tml-image-caption=""><figure><img src="http://a3.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTIzMDQ5NjYzNjMzNjU1MzA4.jpg" /><figcaption></figcaption></figure></div><p>You depend on your team. So when a key staff member tells you that they are considering moving on, it's usually an unexpected (and unwanted) surprise. We asked eight members of Young Entrepreneur Council (<a href="http://yec.co/">YEC</a>) what questions they should ask in this situation. Here's what they had to say: </p><h2>What Are You Not Getting Here?</h2><p>Ask what need they're fulfilling by moving to a different position. Is it pay? Responsibility? Respect? Often there is a problem that's easy to solve, but both sides have made false assumptions about what the other is looking for.</p><p>This is your last chance to have an honest, frank discussion with your employee before they leave. You should try to keep them there depending on what they're looking for. Maybe they would like a shift in responsibilities, or to learn more about a new area. But if they aren't happy in the work environment, can't keep up, or don't feel like they're a match for the team, it's probably time for them to move on.</p><p>—<a href="http://www.twitter.com/lkr">Lauren Roeder</a>, <a href="http://lkrsocialmedia.com/">LKR Social Media</a></p><h2>If You Had a Magic Wand, What Would You Have Changed?</h2><p>If someone is ready to move on, it's likely because they no longer feel motivated or inspired. Asking what they would "magically" change can yield answers that are more telling than if you simply say, "Why are you unhappy?" Hopefully the feedback they give will be helpful in addressing any issues for other employees.</p><p>Unless there is a very clear problem with a simple solution, it's not a great idea to negotiate to try to keep someone on your team. Even key team members are replaceable. You should staff your company with people who are excited to be part of it and believe in your mission, not people whom you begged not to jump overboard.</p><p>—<a href="http://twitter.com/brittanyhodak">Brittany Hodak</a>,&nbsp;<a href="http://www.zinepak.com/">Zine Pak</a></p><h2>What More Do You Need to Stay On?</h2><p>Depending on how key the staffer is, I would analyze their value to the organization and run a cost/benefit analysis. I've been known to double or triple compensation in situations that warranted it. This is particularly true with sales staff who are worth their weight in gold and their contribution is easily quantifiable.</p><p>My advice for entrepreneurs is treat everything as "all business." Don't take it personally if a staffer wants to leave. If it makes sense on a business level to keep them around, then get ready to negotiate.</p><p>—<a href="http://twitter.com/charlesmoscoe">Charles Moscoe</a>,&nbsp;<a href="http://scumbag.com/">Scumbag.com</a>&nbsp;</p><h2>What Can Someone Else Offer That We Can't?</h2><p>If someone discusses their interest in moving on, there's still a part of them hoping to stay. This is their way of starting the conversation. Ask them what someone else can offer that you can't. Talk through it to come to the best decision for everyone involved.</p><p>—Brooke Bergman, <a href="http://www.abnsave.com/">Allied Business Network</a></p><h2>How Can I Improve?</h2><p>Whether or not their resignation is coming from anger, their options opening or their goals changing, asking what you can do to improve your work approach for other employees is extremely important. It establishes your own humility and openness to developing your leadership skills, and chances are they'll provide you with extremely honest feedback.</p><p>—<a href="https://twitter.com/automationhero">Rob Fulton</a>, <a href="http://www.automationheroes.com/">Automation Heroes</a></p><h2>What is the Root of the Problem?</h2><p>Begin with asking why. Find out if there is a problem that you can fix, and if you can’t fix it with them, make sure that you apply it to your business in general. If the issue is simply monetary, see if there is a way you can work with that person on sustainable goals and solutions.</p><p>—Ashley Mady, <a href="http://www.brandberry.com/">Brandberry</a></p><h2>Does This Decision Serve You Well?</h2><p>The one question I would ask one of my key staff members is, "Does this decision serve you well?" I would try to learn where they're wanting to go in life and confirm with them that whatever decision they're making is going to help lead them to that end result.</p><p>—Dan Price, <a href="http://www.gravitypayments.com/">Gravity Payments</a></p><h2>Can You Help Me Understand?</h2><p>I find this question to be enlightening in all sorts of conversations. Thankfully, we have never had a key staff member choose to leave our organization, but if someone expressed the desire to leave, I’d want to understand why. There may be situations where we could find a way to meet their needs without them leaving the company, but we won’t know unless we understand the reasoning behind it.</p><p>—<a href="http://twitter.com/gothamculture">Chris Cancialosi</a>, <a href="http://www.gothamculture.com/">Gotham Culture</a></p><p><em>Images courtesy of <a href="http://www.shutterstock.com/">Shutterstock</a>, <a href="http://yec.co/">YEC</a>&nbsp;</em></p>When someone you value considers moving onhttp://readwrite.com/2014/08/11/startup-employee-quits-questions-yec
http://readwrite.com/2014/08/11/startup-employee-quits-questions-yecStartMon, 11 Aug 2014 06:01:00 -0700Scott GerberIf Your CEO Doesn't Understand Technology, You Need A New CEO<!-- tml-version="2" --><p>If software is eating the world, should it also "eat" your CEO?</p><p>Given how integral technology has become to modern enterprises, it's hard to imagine an executive charting a safe course for any company without a fundamental appreciation for and understanding of technology. While she needn't be an engineer, she needs to at least know one.&nbsp;</p><p>Or, better yet, be able to write a few lines of Java.</p><h2>Parachuting In Engineers</h2><p><a href="http://online.wsj.com/news/articles/SB10001424053111903480904576512250915629460">Marc Andreessen rightly argues</a>&nbsp;that "we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy." Yet most companies still treat technology as an afterthought.</p><blockquote><p><strong>See also: <a href="http://readwrite.com/2014/06/06/software-eating-world-devops-web-reshapes-business">How The Web Is Reshaping Business In Its Own Image</a></strong></p></blockquote><p>In today's world, that seems pretty stupid.</p><p>Taxi companies didn't need to understand technology until Uber came along. Advertisers were safe until Google cropped up. Hotels slept soundly until Airbnb launched. The list goes on.</p><p>One obvious example of a failure to appreciate technology is Healthcare.gov. While ultimately rescued by a crack team of Silicon Valley über-geeks, Healthcare.gov points to all that is wrong with how governments—and companies—deal with technology.</p><p>Commenting on a <a href="http://content.time.com/time/magazine/article/0,9171,2166770-1,00.html">Time magazine story</a> on the saving of Healthcare.gov, <a href="https://www.linkedin.com/today/post/article/20140325160616-16553--they-have-no-use-for-someone-who-looks-and-dresses-like-me?trk=eml-ced-b-art-M-0&amp;midToken=AQHHy9b_jZx3Cw&amp;ut=1Qc5PziQGF-C81">Tim O'Reilly warns</a>, "Bringing in Silicon Valley’s best and brightest is a powerful part of the solution, but it can blind us to the harder work still to be done."&nbsp;</p><p>Governments have been getting better at recruiting technical talent to help build systems. But that's not enough, O'Reilly argues:</p><blockquote><p>[B]ringing more top quality technical people into the Federal government is only part of the solution. It won’t work if those people are just put to work building systems that they have no role in designing. The heart of the problem is the design of government programs that don’t take into account the mechanisms by which they will actually be implemented.&nbsp;<a href="http://www.mysociety.org/2012/02/11/5-years-on-why-understanding-chris-lightfoot-matters-now-more-than-ever/">The UK’s Tom Steinberg</a> put it perfectly: the elites study politics, philosophy, economics, and law while failing to recognize that you can no longer run a country without a fundamental understanding of technology.&nbsp;</p></blockquote><p>If true of countries, surely this is also true of companies?</p><h2>Chief Engineering Officer</h2><p>Think about it. While I've argued that <a href="http://readwrite.com/2014/02/25/why-every-tech-company-needs-an-english-major">every tech company needs an English major</a>, I'm not confused by what makes the Valley tick: technology. Those who can code, rule.&nbsp;</p><p>Tim O'Reilly continues:</p><blockquote><p>In Silicon Valley, the engineers are on top; if you do something, create something that people actually use, you rule the roost. Everyone else is essentially a paper pusher. In DC, though, if you write code, you’re generally about 30 layers away from the people making important decisions.</p></blockquote><p>Not just in Washington, D.C., unfortunately. While you can generally find a CIO listed on most big companies' leadership pages, they're one of many execs, mashed in with CMOs, CFOs and sales heads. For example, Coca-Cola has a CIO, but <a href="http://www.coca-colacompany.com/our-company/coca-cola-leaders">buries him on its webpage</a> among (literally) over three dozen other leaders, most of which are ranked higher.</p><p>Regardless, the CIO is the last to know what's happening down in the code, as <a href="http://readwrite.com/2014/01/31/it-losing-battle-cloud-adoption-enterprise">Billy Marshall once quipped</a>. And technology vision isn't something that can be offloaded to a third party.</p><p>The CEO needs to grok technology.</p><h2>Get That CEO A Command Line</h2><p>The question is, how deeply? I don't expect every company to go out and hire a GitHub hero to run their companies. (Given some of the "brogrammer" scandals roiling the Valley these past few months, that might not be such a great idea.)&nbsp;</p><p>Nor should would-be CEOs skip the MBA to study engineering, though in some cases this arguably wouldn't be such a bad idea.&nbsp;</p><p>But it seems reasonable to expect existing or prospective CEOs to spend time learning about the technology that undergirds their companies. And maybe all CEOs should learn a little programming. This isn't as hard as it sounds for, as the Wall Street Journal's <a href="http://online.wsj.com/articles/computer-programming-is-a-trade-lets-act-like-it-1407109947">Christopher Mims points out</a>, "Computer programming ... has become a trade. Like nursing or welding, it's something in which a person can develop at least a basic proficiency within weeks or months."</p><p>In other words, enterprises need executives that understand technology, and there are quality resources available to help.</p><p>So, if you or someone you know is in a CEO role but doesn't understand technology and needs immediate help, please get them started at Codecademy or otherwise train them to at least a basic level of technical proficiency. They'll thank you later. So will their shareholders.</p><p><em>Lead image courtesy of <a href="http://www.shutterstock.com">Shutterstock</a></em></p>Technical illiterates will sink their companies.http://readwrite.com/2014/08/06/ceo-technology-software-eating-the-world
http://readwrite.com/2014/08/06/ceo-technology-software-eating-the-worldWorkWed, 06 Aug 2014 07:16:29 -0700Matt Asay12 Tips for Creating Your Startup's Board of Advisors<!-- tml-version="2" --><p>As an entrepreneur, it's beneficial to put together a smart, invested board of advisors to help get you through your beginning years and beyond. That's why we asked 12 startup founders from <a href="http://yec.co/">Young Entrepreneur Council</a> (YEC) what is most important when choosing your board.&nbsp;</p><div tml-image="ci01a87e1f19d1860f" tml-image-caption=""><figure><img src="http://a3.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTE5NTU2MzIzNjAzMjg1NTE1.jpg" /><figcaption></figcaption></figure></div><h2>Vest Their Equity Over Time</h2><p>It is extremely difficult to find the right advisers for your business. You need to make sure they have a strong work ethic, sufficient spare time to commit to the company and that they can provide solid advice and resources to your business.</p><p>Instead of giving advisers all of their shares at once, consider having their equity vest over time so you have a fair solution if these factors do not line up, which is often the case.&nbsp;</p><p>—<a href="http://www.twitter.com/DougBend">Doug Bend</a>, <a href="http://bendlawoffice.com/">Bend Law Group</a></p><h2>Bring Them In By The Boatload</h2><p>I would get a large board of advisers at low equity cuts (between a quarter and a tenth of a percent) so that you can really create a huge list of people that can help you with your initial launch. The more advisers you get the easier it will be to get more, and the more you have for your launch the bigger your splash will be. I've seen quite a few few companies pull this off (about.me being a fantastic example).</p><p>—<a href="http://twitter.com/vtamethodman">Liam Martin</a>, <a href="http://www.staff.com">Staff.com</a>&nbsp;</p><h2>Be Selective</h2><p>Most people will informally advise you. Have as many of those kinds of advisors as you like. For your actual board of advisors you should be a lot more selective.</p><p>They get small portions of equity, so they should really know what they're talking about and really help you with the business. They should have experience in startups or your field. They should be somewhat noteworthy, have an exit, experience or strong personal brand. Plan on three to five people. The spots should be coveted.</p><p>—<a href="http://twitter.com/carlocisco">Carlo Cisco</a>, <a href="http://www.meetselect.com">Select</a></p><h2>Seek Counsel, Not Advice</h2><p>It’s important to seek people who can provide counsel instead of people who just give advice. Anyone can give you advice, but counsel is a very specific type of advice that comes from people who have vast knowledge or experience in the area of your business.</p><p>You should always try to surround yourself with people who have more experience or are more knowledgeable than you are. You do not have to be an expert in every area of your business, but you should put together a council of people who are the most knowledgeable about every critical area of your venture. It’s your job to know what those areas are.</p><p>—Arian Radmand, <a href="http://www.coachup.com">CoachUp</a>&nbsp;</p><h2>Build A Fortune 500 Board</h2><p>I would advise an entrepreneur preparing to put his/her board of advisers or board of directors together for the first time that there is potentially no more important task than this in the early phase of starting a company. An advisory board lends credibility, industry expertise and a wide range of introductions and advice that can be crucial to one’s early days as an entrepreneur.</p><p>A dear friend of mine, venture capitalist Emily Melton, advised me early on that “if you want to build a Fortune 500 company, start with a Fortune 500 board.” I took that advice to heart and always went after dream advisers in the wine/ beverage/technology/media industries.</p><p>—<a href="http://www.twitter.com/alyssarapp">Alyssa Rapp</a>, <a href="http://www.bottlenotes.com">Bottlenotes</a>&nbsp;</p><h2>Listen And Reward Them</h2><p>Your advisers should be people that you’re truly excited to listen to. Don’t put people on your list who you wouldn't be excited to chat with for 20 minutes.</p><p>That said, advisory boards are not as practical as you would think. While you will certainly benefit from your advisers' feedback, a board is also an important way to build and maintain your network. Think about who has helped you in the past, who will be there in the future and who you want to bet on.</p><p>—Bhavin Shah, <a href="http://www.refresh.io">Refresh</a>&nbsp;</p><h2>Take Your Time</h2><p>I know many companies that have given away cash or stock options to advisers too quickly, often before getting to know them well or understanding their commitment to the company. Don’t rush into it. Most advisers worth their weight will happily spend time with you and prove their value long before they ask for an official role or any kind of compensation.</p><p>—<a href="https://twitter.com/robertjmoore">Robert J. Moore</a>, <a href="http://www.rjmetrics.com">RJMetrics</a>&nbsp;</p><h2>Bring Different Perspectives Into the Mix</h2><p>Don't fill the room with a bunch of people who will think the same way. It will generate a crippling form of groupthink. Bring different perspectives to the table, because they'll offer a more comprehensive and effective solution. Get a good money guy, operations guy, marketing guy, etc. You'll be able to gain better insights that consider all areas of your business.</p><p>—<a href="http://twitter.com/andykaruza">Andy Karuza</a>, <a href="http://brandbuddee.com">Brandbuddee</a>&nbsp;</p><h2>Look for Passion and Availability</h2><p>Don’t chase a title or a company. Instead, look for board members that are excited about your business and vet them based on their skills, experience and availability. This will help you build a passionate board that is committed to your success.</p><p>—<a href="http://twitter.com/johnberk">John Berkowitz</a>, <a href="http://www.yodle.com">Yodle</a>&nbsp;</p><h2>Have Skin In The Game</h2><p>Don’t rush it, and don’t feel like you have to put a board together right away. By making sure your board members want to be engaged and involved, you can avoid wasting resources like time and money.</p><p>Furthermore, make sure your board members have some skin in the game and have made an investment in the company. This will prove to you that they believe in the company and the leadership, and that they will be willing to work hard to associate themselves with a winning business.</p><p>—<a href="http://twitter.com/Gbousis">George Bousis</a>, <a href="http://www.raise.com">Raise Marketplace</a></p><h2>Seek Specifics</h2><p>When building our advisory team, we drew our dream team of advisers on the whiteboard. We included specific, sometimes famous and out-of-our-reach people.</p><p>Once we had a team we were happy with, we identified the important factors that drove us to include each person on the dream team. Were they a subject matter expert in our space? Did they know influential investors?</p><p>Once we completed this exercise, we were left with specific features, experiences and connections we were looking for in each seat. The rest was easy. We networked to meet people with those specific sets of features. Once you know specifically who you're after, people will help you find them.</p><p>—Brennan White, <a href="https://www.watchtoweranalytics.com">Watchtower</a>&nbsp;</p><h2>Be Respectful</h2><p>Anyone worthy of being on your board of advisors will be an extremely busy business professional. Be respectful of their time and do your homework in preparing and structuring every interaction.</p><p>—<a href="https://twitter.com/stansvik">Björn Stansvik</a>, <a href="http://www.mentormate.com">MentorMate</a>&nbsp;</p><p><em>Lead image courtesy of <a href="http://www.shutterstock.com/">Shutterstock</a>; headshot collage by&nbsp;<a href="http://yec.co/">YEC</a></em></p>Entrepreneurs share advice about what is most important when choosing a board.http://readwrite.com/2014/08/04/startup-tips-board-advisors-yec
http://readwrite.com/2014/08/04/startup-tips-board-advisors-yecStartMon, 04 Aug 2014 07:00:00 -0700Scott Gerber6 Ways To Clear Hurdles As An Entrepreneur<!-- tml-version="2" --><p><strong></strong></p><p>Diane Wang constantly hears stories about adversity. The founder of Joyo.com (which eventually became&nbsp;<a href="http://www.amazon.cn/">Amazon China</a>), now CEO of China e-commerce site <a href="http://www.dhgate.com/">DHGate</a>, says she's flooded with correspondence from people telling her how her business helped them break barriers and realize their dreams.</p><div tml-image="ci01af657b4499860d" tml-image-caption="Diane Wang" tml-render-size="medium" tml-render-position="right"><figure><img src="http://a3.files.readwrite.com/image/upload/c_fill,cs_srgb,w_620/MTE4MDAzNDE3ODgyMjY1MTAy.png" /><figcaption>Diane Wang</figcaption></figure></div><p>For instance, there was the young Chinese woman from a poor background who used DHGate to sell her clothing designs, which eventually allowed her to move to Paris to study fashion design. Similarly, Wang likes to tell visitors about middle-aged, empty-nest&nbsp;mothers in the Chinese countryside who've built their own businesses selling products from their homes.</p><p>Wang, whose resume includes stints at companies like Microsoft and Cisco, co-founded one of China’s first e-commerce sites in 1999. After <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&amp;sid=aTvLoEuMIazQ">Amazon acquired that site, called Joyo</a>,&nbsp;in 2004, Wang went on to build a new e-commerce site, DHGate. </p><p>In some ways, DHGate resembles eBay, in that it essentially connects buyers and sellers, whether individuals, small companies or corporations. It boasts 5.5 million buyers and distributes goods to 224 countries, with North America and Europe among its largest markets. The Beijing-based company boasts 1.2 million suppliers listing over 25 million products.</p><p>Wang also sits on the board of the <a href="http://www.apecwomenleadershipforum.com/">APEC Women Leadership Forum</a>, a network of women aimed at boosting the voice of female businesspeople and encouraging new generations of women leaders and entrepreneurs in the Asia-Pacific region.</p><p>As you might expect, Wang has lots of advice for would-be&nbsp;entrepreneurs about seizing business opportunities. Here are six of her&nbsp;tips for entrepreneurs who might be daunted by the various barriers they face.</p><h2>Dream Big</h2><p>Wang believes that having a dream is the number-one prerequisite for being an entrepreneur. </p><p>“The road to realizing your dream is full of hardship and temptation, and only a dream etched in your heart can help you overcome difficulties and still allow you to be passionate," she says. "The original dream is the foundation that empowers you to stay focused whenever you feel lost."</p><h2>Entrepreneurship Is A Lifestyle</h2><p>Becoming an entrepreneur isn't a part-time job; it's a lifestyle change that affects every part of your day-to-day life. </p><p>“You not only need to stay physically fit to remain capable to solve any emergencies 24/7, but you also need to be psychologically passionate about what you are devoting yourself to,” says Wang. “You can quit a job if you change your mind or feel dissatisfied as an employee. But being an entrepreneur, the words ‘give up’ should not be in your dictionary.”</p><h2>Comfort Zone? What's That?</h2><p>You need to be ready to wear any hat and to playing any role in your company, Wang says. Be prepared to stretch when in unexpected ways.</p><p>“I am not a born speaker,” she confesses. “But as the public face of DHGate.com, my responsibility requires me to jump out of my comfort zone, to overcome my anxiety, practice my speech, and to become a good speaker. Over time, I realized it was an invaluable self-improvement process, and an opportunity to grow with the company along the way.”</p><h2>There Are No Shortcuts</h2><p>Wang founded DHGate when no one in China understood the value of e-commerce. The CEO and her team logged weeks on trains, motorbikes, and donkey carts, criss-crossing China to introduce their business to manufacturers. </p><p>“There is no shortcut to being an entrepreneur," Wang says. "Stop looking for the magic pill, and do the real work that is needed."</p><h2>Be The Biggest Fish In Your Pond</h2><p>Narrow down your focus, because you won’t always be able to beat all of your competitors in every single field. </p><p>“You need to find your business niche and and your unique selling point to distinguish yourself from others, to form your competitive advantages, and to position yourself to be the best in that specific field,” says Wang. </p><h2>Lean On Outsiders To Fill Your Gaps</h2><p>Stay outwardly focused as well. It's a good idea to get to know people in your field but who aren't part of your company. </p><p>“You can partner with professional managers, join forces with another company, or find experienced investors who can supplement what you’re missing,” says Wang. “This allows you to remain focused on what you’re good at, and to unleash your potential to create something of significance.”</p><p><em>Lead image by <a href="https://www.flickr.com/photos/giewor/4328766484/">Flickr user Grzegorz Jereczek</a>, CC 2.0; image of Diane Wang courtesy of</em><em>&nbsp;Diane Wang&nbsp;</em></p>Advice from China's e-commerce mogul.http://readwrite.com/2014/08/01/startup-entrepreneur-hurdles-opportunities-diane-wang
http://readwrite.com/2014/08/01/startup-entrepreneur-hurdles-opportunities-diane-wangStartFri, 01 Aug 2014 08:00:00 -0700Stephanie Ellen ChanHow Companies Can Unlock Billions With The Value of Code<!-- tml-version="2" --><p><em>Guest author Paul Roehrig is</em><em>&nbsp;global managing director at Cognizant’s Center for the Future of Work.</em></p><p>Here’s some tough love for the MBA crowd: The biggest challenge faced by living, breathing business leaders is not something that can be solved with the scary math of a capital-asset pricing model. The problem keeping most leaders awake at night is nearly always some form of, “How do I identify what information really matters to my business? How do I separate signal from noise?”</p><p>If you’re skeptical, just wander into a bookstore. Not a digital one that ends with dot-com. Find a physical one—they still exist—where you can see and touch an actual book that would be familiar to Johannes Gutenberg. Now go to the business section. If you’re at all interested in the world, you’ll find stacks of fantastically enticing books; wisdom collected from past and current leaders and thinkers; more than you could ever get through (with more coming in every day).</p><p>How can any of us possibly pick out the ones we <em>should</em> read? Which will give us the <em>most</em> value? From this wall of information, how do we find what really matters vs. what might be merely interesting (or worse)?</p><h2>Mo' Data, Mo' Problems</h2><p>It’s this confounding challenge—separating signal and value from noise and distraction—that has fueled the current fixation with Big Data. Since you’re already in the business section, look at all the latest titles. Many have something to do with data and information. What is it? How big is it? Where do we put it? My data seems small, so do I need more? Should my data go on a diet? Is there a 12-step program for data?</p><p>Back at work, the problem gets even worse. We all know our company has valuable data, but we don’t know where it is, what to do about it, or whether it’s worth doing <em>anything</em>. Most decision makers stay stuck because there’s so little justification for <em>why</em> you should divert focus to what often feels like some sort of science project.</p><p>In this context, enterprise data starts to feel like that kitchen drawer we never clean out because we don’t <em>really</em> have a compelling reason. We don’t know what lock that old key fits into, but maybe we’ll need it someday, so there it sits, unlocking nothing.</p><h2>What's At Stake</h2><p>But a path forward is finally coming into focus, and it’s almost alarmingly simple. Winning companies are creating business value by building a richer understanding of customers, products, employees, and partners. They are successfully extracting business meaning from a torrent of data to drive performance.</p><p>We say this with confidence because—with the help of the Oxford Economics group and futurist Thornton May—we studied over 300 companies to understand the real-world economic impact of <a href="http://www.cognizant.com/InsightsWhitepapers/The-Value-of-Signal-and-the-Cost-of-Noise-The-New-Economics-of-Meaning-Making.pdf">making real-world business meaning out of data</a>, and the impact couldn’t be more critical.</p><h3>Big Data Is A Big Deal</h3><p>Firms we studied achieved a total economic benefit of roughly<strong> </strong>$766 billion in just one year<strong> </strong>(including roughly $399 billion in increased revenue and $367 billion in cost reductions) based on their use of business analytics.</p><h3>Business Analytics Can Reshape Your Income Statement</h3><p>Investment in business analytics yielded an average 8.4% increase in revenues and an average 8.1% improvement in cost reduction&nbsp;over the previous fiscal year. Companies that generated the most value from business analytics—what we called the “Meaning Makers”—did even better than the average.</p><h3>Companies Are Leaving Billions On The Table</h3><p>If the surveyed companies used all the analytics techniques currently available, respondents estimate they could release an additional 11.9% of economic value in the next 12 months. Right now, that’s real money being left on the table.</p><div tml-image="ci01a33b7b81cd860e" tml-image-caption=""><figure><img src="http://a2.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTE4MDAzNDE2ODg2MzgwMDQ2.jpg" /><figcaption></figcaption></figure></div><p>A common misconception is that wrangling data well simply drives down operating costs. That’s still true, but another lesson that came through loud and clear is that companies that separate the signal from the noise do better than their competitors in both revenue generation and cost cutting.[*] Those that did a good job extracting value from information had significantly better business results.</p><p><em>[*] We identified 78 of 300 companies (26%) as “meaning makers” who generated significantly more value than others. “Data collectors” are those that lag significantly behind industry leaders (24%). The remaining 50%—“data explorers”—are companies in the middle of the pack.</em></p><div tml-image="ci01a87e1edd65860f" tml-image-caption=""><figure><img src="http://a3.files.readwrite.com/image/upload/c_fill,cs_srgb,dpr_1.0,q_80,w_620/MTE5NDg0MDYxMTUzNzIzOTE5.jpg" /><figcaption></figcaption></figure></div><h2>How You Can Make Your Data Work For You</h2><p>These results aren’t science fiction or unattainable goals reserved for the current crop of high-fliers like Google or Apple. This matters for all of us.</p><p>UPS has become a technology company with trucks, and it saves millions every year by harnessing data to shape decisions about loading, delivery runs, and even truck engine efficiency. Netflix has driven business analytics and meaning making deeply into the core of its product development process to create hits like <em>House of Cards</em> and <em>Orange is the New Black</em>. Toyota is harnessing data from multiple sources to better understand how cars are performing and anticipate problems before they arise. Clorox uses unstructured data to determine what is resonating with clients and better connect advertising spend to business results.</p><p>So what to do tomorrow? Every company is different, so there is no single “right” answer, but there are a few simple tactics companies can start tomorrow.</p><h3>Become A "Meaning Maker" (Or Pay The Price)</h3><p>Companies that use data to connect customers, partners, devices, and their brands can thrive. Companies that do not act to become "meaning makers" will undoubtedly face a tough journey—or even an extinction event. Executives should look at their businesses and decide where to apply the new economics of meaning-making in the near-term.</p><h3>It's All About The SMAC Stack</h3><p>Social, mobile, analytics and cloud (SMAC) technologies are coalescing into a new IT architecture that can help rewire virtually every business. Data from mobile devices, social tools, and cloud-enabled solutions contains massive value if de-coded and harnessed. Business process owners and technology leaders should be proactive about finding ways to leverage these tools.</p><h3>Narrow Your Focus</h3><p>The imperatives to “do analytics” or “use big data” are just too broad to be useful. Focus on a specific business process. Whether it’s your underwriting process, clinical drug trials, wealth management service, supply chain or customer relationship management process, target work that shapes at least 10% of your costs or revenues. This is exactly what companies such as Zappos, Netflix, UPS, Toyota, Pandora and others do around key processes.</p><h3>Don’t Overlook Your Small-Data Problems</h3><p>Most companies have tremendous wisdom locked up in spreadsheets, call centers and employees’ heads. You don’t always need a billion records to derive business meaning. Start by exploring the data you do have. Get the right people in the room and dig deeply into what you have. This will help break the inertia and start people <a href="https://www.youtube.com/watch?v=PZkuQ_BUZ50">thinking about how to make business meaning</a>.<a href="https://mail.google.com/mail/?pli=1#146ed9669f261ed6_146ed85c4c7c9cb2_146d935a4a28dbed_146149fb68ee2e45__edn3"></a></p><h3>Build A Business Analytics Ecosystem</h3><p>Winning based on knowledge requires a new set of skills. The harsh reality is that there will not be enough people with the right skills to keep up with demand, so most companies won’t be able to go it alone. Savvy decision-makers know that building an ecosystem of consultants and service providers can help deliver the right capabilities to the company.</p><p>The power of insight is starting to shape markets and disrupt business processes. We’re well beyond theory building, and these trends will only accelerate in the coming quarters and years. The companies that ultimately win will be those that de-code the new economics of meaning-making. They will reimagine work, see business processes and customers as sources of insight, and find ways to keep human judgment and values <a href="http://www.unevenlydistributed.com/article/details/humanum-in-machina-moving-from-big-data-to-smart-questions-and-big-answers">embedded in real-world business decisions</a>.<a href="https://mail.google.com/mail/?pli=1#146ed9669f261ed6_146ed85c4c7c9cb2_146d935a4a28dbed_146149fb68ee2e45__edn4"></a></p><p><em>Cognizant's Malcolm Frank and Benjamin Pring contributed to this piece. Together with Paul Roehrig, they are the authors of </em><a href="http://www.amazon.com/gp/product/1118862074">Code Halos: How the Digital Lives of People, Things, and Organizations are Changing the Rules of Business</a><em>.</em></p><p><em>Lead image courtesy of </em><a href="http://www.shutterstock.com/"><em>Shutterstock</em></a></p>We have one word for you: Analytics.http://readwrite.com/2014/07/30/value-of-code-companies-enterprise-unlock-billions
http://readwrite.com/2014/07/30/value-of-code-companies-enterprise-unlock-billionsWorkWed, 30 Jul 2014 08:00:00 -0700Paul Roehrig